EMPLOYMENT AGREEMENT
DATE: September 12, 2000
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PARTIES: CAPITAL CORP. OF THE WEST, A California Bank Holding Company,
- ------- hereinafter referred to as "Employer"; and
THOMAS T. HAWKER, herein after referred to as "Employee".
RECITALS:
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1. Employee is currently employed as the Chief Executive Officer
of Employer under a written Employment Agreement dated March
11, 1997, which will expire at the close of business of
December 31, 2000.
2. The Parties desire to enter into a new Employment Agreement
for an additional one (1) year term on basically the same
terms and conditions as the March 11, 1997 Employment
Agreement.
AGREEMENT:
- ----------
Employer hereby agrees to extend the employment of Employee, and Employee
hereby accepts said extension of employment with Employer, upon the terms and
conditions hereinafter set forth.
1. DUTIES.
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Employee is hereby employed as the President and Chief Executive
Officer of Employer. Employee shall perform the customary duties of a Chief
Executive Officer of a California bank holding company, including but not
limited to, the supervision of Employer's business and all subsidiary
corporations and businesses owned or related to Employer and such kindred duties
as may from time to time be reasonably requested of Employee by the Board of
Directors of
Employer. As used herein the term "business of Employers" shall include the
business of any of Employer's subsidiaries and related entities.
2. APPOINTMENT TO BOARD OF DIRECTOR.
--------------------------------
Employer hereby agrees that Employee shall remain a member of the Board
of Directors of Employer for so long as Employee is elected to a position on the
board by the shareholders of Employer, or until this Agreement has been
terminated. During the period of Employee's election to the Board of Directors,
Employee shall serve as a member of any or all committees to which he is
appointed, except the audit committee. Employee also hereby agrees to accept
appointment to other boards of directors and committees f subsidiary and related
organizations of Employer. Employee shall fulfill all of Employee's duties a s a
board and committee member without additional compensation. Upon the termination
of this Agreement by either Employee of Employer, Employee agrees to immediately
resign from the Board of Directors, form all committees and from all corporate
offices of Employer and from all of Employer's subsidiaries and related
companies; further, all fringe benefits, such as insurance, shall be terminated
on the last day of service of Employee, unless otherwise mandated by the terms
of this Agreement, Employer's personnel policy, or any other benefit policies in
effect at the time of such termination.
3. TERM.
----
Provided Employee is still employed by Employer through December
31, 2000, this Agreement shall be effective for a period of twelve (12) months
thereafter, and employment under this agreement shall commence on
January 1, 2001 and unless sooner terminated as
provided herein, shall end on December 31, 2001 ("Term").
4. EXTENT OF SERVICES.
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Employee shall donate his full time, attention and energies to the
business of Employer, and shall not during the Term of this Agreement by engaged
in any other business activities, except personal investments, without the prior
written consent of Employer.
5. REGULAR COMPENSATION.
--------------------
In consideration for the services which Employee is to render under
this Agreement, Employer shall pay to Employee a base salary ("Base Salary") of
Two Hundred Thousand Dollars ($200,000.00). the Base Salary shall be payable to
Employee in equal semi-monthly instalments on the fifteenth and last working day
of each month during the period of employment.
6. DISCRETIONARY INCENTIVE COMPENSATION.
------------------------------------
Employee shall be entitled to participate in any incentive programs
which may be adopted from time to time by Employer for Employee. Amounts awarded
to Employee under any said incentive program shall be determined at the sole
discretion of Employer, including the vesting of any incentive awards.
7. BUSINESS EXPENSES.
-----------------
Employee shall be reimbursed for all ordinary and necessary, documented
expenses reasonably incurred by Employee in connection with his employment
associated with managing
the business of Employer and other expenses which may be authorized from time to
time by the Board of Directors of Employer, including expenses for club
membership, entertainment, travel and similar items. Travel and other expenses
for attendance at conventions and banking education programs that are approved
by the Board of Directors shall also be reimbursed. Employer will pay for or
will reimburse Employee for such expenses upon presentation by Employee from
time to time of receipts evidencing such expenditures.
3. AUTOMOBILE.
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Employer shall provide an automobile for the use of Employee. Employer
shall pay all fuel, operation, maintenance and insurance costs associated with
such automobile. Employee shall be entitled to limited use of the automobile for
personal use, but shall primarily use it for business purposes associated with
his employment.
4. VACATION.
--------
During the term of employment Employee shall be entitled to vacation
leave at full salary at the discretion of Employee as time allows, so long as it
is reasonable and does not jeopardize his responsibilities, of sixteen (16) days
plus an additional four (4) bonus days if he receives a "satisfactory" or higher
rating on his Annual Employee Performance Evaluation; provided that Employee
shall take as a portion of his vacation leave at least ten (10) consecutive
business days.
5. DISABILITY.
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If Employee becomes permanently disabled during the Term because of
sickness, physical or mental disability, so that he is unable to perform his
full duties hereunder, Employer
agrees to continue the salary (i) ninety (90) days from commencement of the
disability, (ii) until Employee is able to return to work, (iii) until payments
commence under any disability insurance policy obtained by Employee, or (iv)
when any payments commence to Employee under the separate Salary Continuation
Agreement executed between the parties, whichever is less.
6. INSURANCE.
---------
Employer shall provide to Employee, his wife and qualifying children,
during the Term at Employer's expense the same medical insurance, dental
insurance, and disability insurance coverage, if any, which may be offered to
Employer's other full-time employees under any benefit plans as may be in effect
from time to time.
The parties acknowledge that Employee's Base Salary has been set high
enough under this contract so that Employee may pay for life insurance. However,
Employee shall have the right to determine whether to maintain life insurance
and use part of his Base Salary to cover the premiums thereon, or to use the
Base Salary for other purposed. Employer shall have no duty under this agreement
to give Employee any additional compensation to cover life insurance premiums or
to maintain any life insurance of Employee's life.
7. STOCK OPTIONS AND BONUSES.
-------------------------
As part of the consideration for entering into the prior Employment
Agreement dated March 11, 1997, Employer granted to Employee a stock option to
purchase 8,000 shares of Employer's stock at a price equal to the fair market
value of such stock. No additional options are granted as part of this Agreement
although the final 20% of the 8,000 share option granted earlier shall vest in
Employee on January 1, 2001 provided this Agreement is fully executed and
Employee is still employed on said date.
Employer may consider granting additional stock options and bonuses
from time to time during the term, but shall not be obligated to do so.
8. RETIREMENT PLAN.
---------------
Employer shall be entitled to participate in any retirement plans
offered to other employees of Employer such as Employee's participation in
Employer's 104 K plan and participation in Employer's Stock Option Plan (ESOP).
In addition it is acknowledged that Employer and Employee have entered into a
separate" Amended and Restated Salary Continuation Agreement" dated October 30,
1996, which provides for gradual vesting of retirement benefits to Employee
based on his continued employment with Employer. The Parties to this agreement
understand that the participation by employment of Employee under this
Employment Agreement.
9. PRINTED MATERIAL.
----------------
All written, printed, visual or audio materials used by Employee in
performing duties for Employer, other than Employee's personal notes and
diaries, are and shall remain the property of Employer. Upon termination of
employment on any basis, Employee shall return all such materials to Employer.
10. DISCLOSURE OF INFORMATION.
-------------------------
In the course of employment, Employee may have access to confidential
information and trade secrets relation to Employer's business. Except as
required in the course of employment by
Employer, Employee shall not, without Employer's prior written consent, directly
of indirectly disclose to anyone any confidential information relating to
Employer of any financial information, trade secrets or "know-how" which is
germane to Employer's business and operations. Employee recognizes and
acknowledges that any financial information concerning any of Employer's
customers, as it may exist from time to time, is strictly confidential and is a
valuable, special and unique asset of Employer's business. Employee shall not,
either before or after termination of this Agreement, disclose to anyone said
financial information, or any part thereof, for any reason or purposes
whatsoever.
16. PROHIBITED ACTIVITIES AND INVESTMENTS.
-------------------------------------
During the Term of this Agreement, Employee shall not, directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, principal stockholder (i.e., ten percent or more) or corporate officer,
directly, or in any other individual or representative capacity, engage or
participate in any banking business competitive with that of Employer.
17. SURETY BOND.
-----------
Employee agrees to furnish all information and take any other steps
necessary to enable Employer to obtain and maintain a fidelity bond conditional
on the rendering of a true account by Employee of all moneys, goods, or other
property which may come into the custody, charge, or possession of Employee
during the Term of Employee's employment. The surety company issuing such bond
and the amount of the bond must be acceptable to Employer. All premiums on the
bond are to be paid by Employer. If Employee cannot personally qualify for a
surety bond at any time during the Term of this Agreement, Employer shall have
the option to terminate this
Agreement immediately and said termination shall be deemed to be a termination
for cause.
18. MORAL CONDUCT.
-------------
Employee agrees to conduct himself at all times with due regard to
public conventions and morals and to abide by and reflect in his personal
actions all of the "core values" adopted by Employer and its subsidiaries from
time to time. Employee further agrees not to do or commit any act that will
reasonably tend to degrade him or to bring him into public hatred, contempt or
ridicule, or that will reasonable tend to shock or offend any community in which
Employer engages in business, or to prejudice Employer or the banking industry
in general.
19. TERMINATION OF AGREEMENT.
------------------------
(a) TERMINATION FOR CAUSE.
---------------------
Employer reserves the right to terminate this Agreement "for cause."
Termination for cause shall include termination because of Employee's (i)
personal dishonesty, (ii) incompetence, (iii) willful misconduct, (iv) breach of
fiduciary duty involving personal profit, (v) material breach of any of the
terms of this Agreement, (vi) intentional failure to perform assigned duties,
(vii) willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or (viii) the
willful or permanent breach by Employee of any obligations owed to Employer
pursuant to this Agreement. In addition, Employer reserves the right to
terminate this Agreement "for cause" in the event that actions are effected by
any regulatory agency having jurisdiction to remove or suspend Employee from
office, or upon the directive of any such regulatory agency that Employer must
remove Employee as its Chief
Executive Officer, regardless of whether such directive is given orally or in
writing.
(b) STATUTORY GROUNDS FOR TERMINATION.
---------------------------------
Employee's employment under this Agreement shall terminate
immediately upon the occurrence of any of the following events, which events are
described in sections 2920 and 2921 of the California Labor Code:
(1) The occurrence of circumstances that make it
impossible or impractical for the business of Employer to be continued.
(2) The death of Employee
(3) The loss of Employee of legal capacity. This does
not effect Employee's rights under Section 10 of this Agreement.
(4) The loss by Employer of legal capacity to contract.
(5) Subject to Section 10 of this Agreement, the
continued incapacity on the part of Employee under this Agreement, unless waived
by Employer.
(c) TERMINATION FOR BANKRUPTCY.
--------------------------
This Agreement may be terminated immediately by either party at the
option of either party and without prejudice to any other remedy to which either
party may be entitled at law, in equity or under this Agreement if either party:
(1) Files a petition in bankruptcy court or is
adjudicated a bankrupt;
(2) Institutes or suffers to be instituted against it or
him any procedure in bankruptcy court for reorganization or rearrangement of his
financial affairs;
(3) Has a receiver of his assets or property appointed
because of insolvency;
(4) Makes a general assignment for the benefit of
creditors.
(d) AUTOMATIC TERMINATION IN THE EVENT OF ACQUISITION OF
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EMPLOYER.
- ---------
This Agreement shall automatically terminate upon the consummation of
any event by which substantially all of the stock and/or assets of Employer are
acquired by a person, a group of persons, a financial institution or other
entity.
At the closing of such acquisition, Employee shall receive an
acquisition payment ("Acquisition Payment") in the amount equal to six (6)
months Base Salary at the then current rate of compensation.
In the event of any such acquisition of Employer and the consequent
automatic termination of the Agreement, no provision contained in this Agreement
should be construed to prevent Employee from negotiating a new employment
agreement with either Employer or the acquiror of Employer, should the parties
desire to do so.
It is mutually agreed by the parties that the above-referenced
Acquisition Payment shall be received by Employee in lieu of any and all claims
and/or damages which may be sustained by Employee due to the acquisition of
Employer and the termination of Employee's employment and will be accepted by
Employee in full satisfaction of all such claims and damages.
20. SEVERANCE PAY.
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Upon early termination of this Agreement (i) pursuant to Section 19(d)
of this Agreement, (ii) by Employee for any reason, (iii) by Employer "for
cause" (pursuant to Section 19(a) of this Agreement), or (iv) because of the
death, incapacity or disability of Employee, Employee shall not receive any
Severance Payment of any sort or any bonus for the calendar year in which
termination is effected.
The parties acknowledge that it would be difficult to determine the
damages which Employee would suffer if his employment is terminated by Employer
without cause or on statutory grounds. Therefore it is agreed that if this
agreement is terminated early by Employer on any basis other than those listed
in the first paragraph of this Section 20, then Employee shall be entitled to
receive a cash payment ("Severance Payment") in the amount equal to one year's
Base Salary at the then current rate of compensation. It is mutually agreed by
the parties that the payment of the cash Severance Payment set forth above shall
be received by Employee in lieu of any and all claims and/or damages which may
be sustained by Employee by reason of his early termination and will be accepted
by Employee in full satisfaction of all such claims and damages and as payment
in full for all benefits received from Employee's services. The parties
understand and agree under no circumstances would Employee be entitled to
receive both the Acquisition Payment and the Severance Payment.
21. NOTICES.
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Any notice to Employer required or permitted under this Agreement shall
be given in
writing to Employer, either by personal service or by certified mail, postage
prepaid, addressed to the chairman of the Board of Directors of Employer at its
then principal place of Business. Any such notice to Employee shall be given in
like manner and, if mailed, shall be addressed to Employee at Employee's home
address then shown on Employer's files. For the purpose of determining
compliance with any time limit in this Agreement, a notice shall be deemed to
have been duly given (a) on the date of service, if personally served on the
party to whom notice is to be given, or (b) the fifth business day after
mailing, if mailed to the party to whom notice is to be given in the manner
provided in this Section.
22. NONASSIGNABILITY.
----------------
Neither this Agreement nor any right or interest hereunder shall be
assignable by Employee, his beneficiaries or legal representative without
Employer's prior written consent; provided, however, that nothing in this
Section 22 shall preclude (i) Employee from designation a beneficiary to receive
any benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of Employee or his estate from
assigning any rights hereunder to the person or persons entitled thereto.
23. NO ATTACHMENT.
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Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
24. BINDING EFFECT.
--------------
This Agreement shall be binding upon, and inure to the benefit of,
employee and Employer and their respective permitted successors and assigns.
25. MODIFICATION AND WAIVER.
-----------------------
(a) AMENDMENT OF AGREEMENT
----------------------
This Agreement may not be modified or amended except by an istrument in
writing signed by the parties hereto.
(b) WAIVER.
------
No term or condition of this Agreement shall be deemed to have been
waived nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition for the future or as to any act other than
that specifically waived. No delay in exercising any rights shall be construed
as a waiver, nor shall a waiver on one occasion operate as a waiver of such
right on any future occasion.
26. ENTIRE AGREEMENT.
----------------
This agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the employment of
Employee by Employer. This
Agreement contains all of the covenants and agreements between the parties with
respect to such employment in any manner whatsoever. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party, or anyone acting
on behalf of any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
and binding.
27. PARTIAL INVALIDITY.
------------------
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.
28. GOVERNING LAW.
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This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
29. INJUNCTIVE RELIEF.
-----------------
Employer and Employee acknowledge and agree that the services to be
performed under this Agreement are of a special, unique, unusual, extraordinary
and intellectual character which give them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law.
Employer and Employee therefore expressly agree that Employer and Employee, in
addition to any other rights or remedies which Employer and employee may
possess, shall be entitled to injunctive and other equitable relief to prevent a
breach of this
Agreement by Employee and Employer.
30. BANK REGULATORY AGENCIES'.
-------------------------
The obligations and rights of the parties hereunder are expressly
conditioned upon the approval or non-disapproval of (i) this Agreement and/or
(ii) Employee, in the event such approvals are required, by those regulatory
agencies which have jurisdiction over Employer or any of its subsidiaries.
31. DUPLICATE ORIGINALS.
-------------------
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
EMPLOYER: CAPITAL CORP OF THE WEST
By:
-----------------------------
James W. Tolladay
Chairperson of the Board
EMPLOYEE:
-----------------------------
Thomas T. Hawker
President/CEO